The Roving Cavaliers of Credit
By Steve Keen
Published in January 31st, 2009Posted by Steve Keen in Debtwatch
Talk about centralisation!
The creditsystem, which has its focus in the so-called national banks and the big money-lenders and usurers surrounding them,constitutes enormous centralisation, andgives this class of parasites the fabulouspower, not only to periodically despoilindustrial capitalists, but also to interferein actual production in a most dangerousmanner— and this gang knows nothingabout production and has nothing to dowith it.” 
Ten years ago, a quote from Marx would have one deemed a socialist, anddismissed from polite debate. Today, such a quote can (and did, along withCharlie’s photo) appear in a feature in the Sydney Morning Herald—and nota few people would have been nodding their heads at how Marx got it righton bankers.FHe got it wrong on some other issues, but his analysis of money andcredit, and how the credit system can bring an otherwise well-functioningmarket economy to its knees, was spot on. His observations on the financialcrisis of 1857 still ring true today:
“A high rate of interest can also indicate, as it did in 1857, that the country isundermined by the
roving cavaliers of credit
who can afford to pay a highinterest because they pay it out of other people’s pockets (whereby,however, they help to determine the rate of interest for all), and
meanwhilethey live in grand style on anticipated profits
.Simultaneously, precisely this can incidentally provide a very profitablebusiness for manufacturers and others.
Returns become wholly deceptiveas a result of the loan system
One and a half centuries after Marx falsely predicted the demise of capitalism, the people most likely to bring it about are not working classrevolutionaries, but the “Roving Cavaliers of Credit”, against whom Marxquite justly railed.This month’s Debtwatch is dedicated to analysing how these Cavaliersactually “make” money and debt—something they think they understand,but in reality, they don’t. A sound model of how money and debt are created